Lango to acquire Hyprop and Attacq-owned Sub-Saharan Africa malls

South Africa's largest listed specialized shopping center Real Estate Investment Trust, Hyprop, has announced a groundbreaking agreement for Lango to acquire Hyprop and Attacq-owned Sub-Saharan malls for 1 billion rand this year. The move comes as a part of Lango's long term strategy to reduce its exposure in Sub-Saharan Africa and focus on its core market in South Africa. Dolapo Omidire, CEO of Estate Intel, discussed this pivotal transaction and other trends in Africa's commercial real estate market on a recent CNBC Africa interview. Omidire expressed optimism about the deal, highlighting the significance of such large-scale transactions in the region. He noted that while it took Lango nearly six years to divest its assets in Sub-Saharan Africa, the agreement with Hyprop and Attacq marks a positive development. The real estate market in Africa is witnessing a shift in investment strategies, with investors moving away from build and flip private equity approaches. Instead, the focus is increasingly on long-term income strategies and sustainability, with green financing in real estate projected to surpass $2 billion this year. Omidire emphasized that while transaction volumes in commercial real estate are high, prices often reflect discounts and below-target levels for sellers. Despite challenges, the market is seeing increased activity, with assets being disposed in various markets. In Nigeria and Ghana, commercial property development, especially in the retail sector, continues, albeit with smaller malls focusing on competitive rental pricing. The trend of moving away from building and flipping properties is gaining traction among investors. This is evidenced by Hyprop's prolonged process to exit its Sub-Saharan African portfolio, signaling a broader shift towards a more sustainable and income-focused approach to real estate investment. The prevailing high cost of construction has deterred investors from embarking on new developments and instead encouraged a focus on existing assets within income funds. Omidire highlighted the importance of transitioning existing assets into income-generating streams that can cater to institutional investors and potentially enter the capital markets through REITs or other investment vehicles. Overall, the commercial real estate landscape in Africa is evolving, with a growing emphasis on long-term value creation and sustainability in line with global trends. As the region continues to attract investment and witness significant transactions like Lango's acquisition of Hyprop and Attacq-owned malls, the future of Africa's commercial real estate market looks promising and dynamic.